WHAT ARE DISBURSEMENTS

DISBURSEMENTS DEFINITION 

Disbursements are costs and expenses paid by a lawyer on behalf of a client in order to close a Real Estate deal. It is important to note that theses are expenses and not our fees. These expenses include:

Title Search

Title Search or property title search is a process of retrieving entire history of the property in question. Our office will perform the search to confirm the ownership of the property, any outstanding mortgage, liens charges or encumbrances and will also search for any fraudulent activity on the property. Based on the title search our office will inform the lawyer of the seller to clear all non-permitted encumbrances.

Land Transfer Tax

The land transfer tax is technically not a disbursement but it is listed herein because it is an expense which the buyer would have to pay at the time of transferring the property in his/her name.  The Land Transfer Tax to the Government when the transfer of title documents are presented for registration. This expenses is only to be paid by the purchaser.

Title Registration

The Ontario Land Registration Office Charges $74.42 for a Registration of a document.

The Winnipeg Property Registry charges a $87  for a Registration of a document.

Building Location Certificate (Survey Certificate)

A Building Location Certificate exhibits the  dimensions, positions and location of the land and/or buildings  of  a  property in question. Building location certificate primary function is to highlight any encroachments from adjoining properties. It is important to have the location survey certificate to guarantee the ownership of the property and protects the purchaser by highlighting any encroachments on the property. If the purchaser is seeking to secure a mortgage then the financial institution will require an up-to-date Building Location Certificate which could cost up-to $600. If the property is old it may not have a Building Location Certificate and therefore he Lawyer of the purchaser on behalf of the client will obtain Title Insurance cover up this deficiency.

Zoning Memorandum

The Zoning Memorandum is equally important as a Building Location Certificate.   The Zoning Memorandum will certify if the property in question complies with the zoning requirements such as residential, commercial or agricultural. If the property is old it may not have a Building Location Certificate and therefore he Lawyer of the purchaser on behalf of the client will obtain Title Insurance cover up this deficiency.

Title Insurance

Many financial institutions will require a Title Insurance for almost every mortgage, unless it is brand new home, in place of Building Location Certificate and Zoning Memorandum,  Title Insurance  may vary from $260.00 to $360. This is a one time charge levied at the time of purchase of property.

Tax Certificate

A tax certificate, issued by the City of Winnipeg,  confirming that all property taxes are paid on your property.

Miscellaneous

  • File Administration and Storage fees
  • Courier
  • Bank Charges for Certified Cheques to the Seller Lawyer
  • Photocopying
  • Facsimiles
  • Advance 30 days of interest depending on your mortgage rate. This is a refundable interest depending on the date when we receive funds from your lender. Suppose if your lender releases funds after 5 days then the lender will charge interest from the 6th day and we will adjust 5 days of interest from your funds and refund you the remaining 25 days of advance interest charged.

DO I NEED A REAL ESTATE LAWYER

Yes

The seller and purchaser would need a lawyer to witnessed the signatures of the parties. The Lawyer will make sure that correct homestead provisions are used for the transaction. In the event of a Power of Attorney the Lawyer is will prepare appropriate documents and will take all necessary steps to verify the power of attorney.  The Lawyer will receive purchase funds and will hold it in trust to be transferred to the vendor, upon registrations of title documents. Lawyer will also take steps to ensure that seller’s mortgage, liens and caveats are removed from the title and the purchaser receives the property without existing charges of the previous owner.  You can prepare your documents on your own and have a lawyer witness your land titles documents, even attempt to register the documents yourself but due to the complexity of the transaction it is always best to have the lawyer deal with set of documentation and transfer of funds. More so if you were to prepare and submit the documents yourself you may end up spending more time and money in travel costs. It is always good to have a real estate lawyer work on your closing.

STEPS TO BUYING A HOUSE OR CONDO

STEPS TO BUYING A PROPERTY

STEPS TO BUYING A PROPERTY

Once you have decided to buy a property and have obtained your mortgage approval you would need to identify which lawyer will prepare your transfer documentation. Your Lawyer would need the following information.

  1. Copy of the Offer to Purchase.
  2. Date of Birth, Marital Status, Contact Information, with two pieces of ID of each individual who will be on the title.
  3. If you have obtained a Mortgage then you would need to instruct your bank to fax Mortgage Instructions to your lawyer.
  4. You would need to instruct your Fire Insurance broker to fax the copy of the Fire Insurance or Binder of Fire Insurance to your lawyer.
  5. Set-up an appointment to sign your documents with your lawyer.
  6. Receive Keys to the Property.
  7. Do not enter the Property Prior to Possession date and time.
  8. Upon Possession note meter reading of all Utilities such as Hydro, gas and water and set up your new account.
  9. Receive Registered Title from your lawyer within two to three weeks confirming transfer of Ownership and Registration of Mortgage in your name.

CLOSING COSTS WHEN BUYING A PROPERTY

Closing Costs when Buying a House or Condo

Closing costs when buying a house or a Condo varies from City to Province in Canada. However a general estimates can be a good guideline, to start budgeting for the costs incurred in additional to your monthly mortgage and down payment.

 

Estimated Percentage: If you do not want to read the entire blog and save time just estimate between 1.5 to 3% of the Sale Price of the Property. This would include all break up of Fees, Disbursement, Costs, Expenses and Taxes mentioned hereunder.

Home Inspection Fees: $500 to $800 Optional costs but strongly recommended to have it done. It is usually placed as a condition to the Offer to purchase.

Appraisal Fees: $200 to $300 some lenders would prefer to appraise the home before granting the loan. (optional).

CMHC Fees: If you down payment is less then 20% then you would be pay for default insurance.

Loan upto 85%

1.80% Fees

Loan upto 90%

2.40% Fees

Loan upto 95%

3.60% Fees

Loan 90.01 to 95% Non Traditional

3.85% Fees

Non – Traditional: 5% down for less than $500,000 and 10% down for more than $500,000.

Credit Score: 650 Recommended

Debit to service ratio: between 42 to 44%

Only one mortgage.

Lowest Legal Fees   Legal Fees:  We have two Office Locations, Mississauga, Ontario & Winnipeg Manitoba.

Ontario Office Legal Fees

$450+ Taxes.

Manitoba Office Legal Fees:

$275 + Taxes$275 + Taxes

Law Office Disbursement: $150 to $250 + Taxes (Approximate).

Courier Costs – 5 to 7

$50 Approximate.

Bank Draft/ Certified Cheques 3 to 5

$30 to $50 Approximate.

Mis – Photocopy, Faxes etc

$20

Software Charge

$50

 

Title Search Tax Search Writ Search

Title Searches:

Ontario Searches:

$150 (1Title search/ 1 Tax Search/ 2 Writ searches)

$150 to $250 (Writ of Execution clearance certificate)

Manitoba Searches:

$90 (Title and Tax Search)

Registration Transfer & Mortgage

Registration of Title/ Mortgage:

Ontario:

$75 (Transfer)

$75 (Mortgage)

Manitoba:

$87 (Transfer)

$87 (Mortgage)

How much for Title Insurance  

Title Insurance: $250 to $350. Most of the lenders would require a title insurance before funds could be issued to your lawyer. It is one time payment and it will protect the purchaser from any defect in title.

Condo Certificate/ Estopple Certficate: $100 to $200. If you are buying a Condo then your lawyer would need to review the Condo or strata certificate to confirm that the condo is free from any claims, liens or charges.

Land Transfer Tax Ontario & Manitoba

Land Transfer Tax:

Ontario:

Frist $55,000                   – 0.5%

$55,000 – $250,000     – 1.0%

$250,000 – $400,000 – 1.5%

Over $400,000           – 2%

NOTE: Upto $2,000 First Time home buyer rebate.

Toronto Land Transfer Tax:

Frist $55,000                   – 0.5%

$55,000 – $40,000       – 1.0%

Over $400,000           – 2%

NOTE: Upto $3725 First Time home buyer rebate.

Manitoba:

$30,000 – $90,000         – 0.5%

$90,000 – $150,000       – 1.0%

$150,000 – $200,000 – 1.5%

Over $200,000           – 2%

NOTE: No Land Transfer Tax Rebate in Manitoba